President Trump has revived tariff threats against South Korea, promising to impose 25% duties on major exports if Seoul fails to properly implement a trade deal from 2024. The announcement targets key sectors including automobiles, pharmaceuticals, and lumber.
The disputed trade and security agreement was finalized in October 2024 after negotiations between Trump and South Korean President Lee Jae Myung. While both leaders initially celebrated the deal, it has since become mired in South Korean domestic political disputes.
Korean officials expressed frustration at receiving no diplomatic advance notice of the tariff threat. The government is mobilizing responses including emergency consultations in Washington and expedited legislative action to pass five bills enabling promised investments.
South Korea’s export-dependent economy is particularly vulnerable to tariff changes, with the automotive industry representing the greatest exposure at 27% of total exports to America. Market reaction included immediate stock price declines for Korean carmakers.
Trump’s willingness to threaten major tariffs against a key ally demonstrates his continued emphasis on trade policy as a diplomatic weapon. International trade experts warn that even threats that aren’t implemented create business uncertainty and market volatility.